35107 - Botswana Building Society

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Summary of Investment Information

Project Number

35107

Company Name

Botswana Building Society

Date SPI Disclosed

Jul 18, 2016

Country

Botswana

Region

Africa

Projected Board Date

Sep 29, 2017

Environmental Category

FI-2 - Limited

Status

Completed

Last Updated Date

Mar 20, 2022

Department

Regional Industry - FIG Africa

Industry

Financial Markets

Previous Events

Approved : Oct 18, 2017
Signed : Oct 26, 2017
Invested : Dec 5, 2017

Sector

Primary Mortgage Institutions

Project Description

The proposed project comprises a loan investment by IFC of up to US$40 million equivalent to help strengthen the long-term funding position of a financial institution in Southern Africa.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	25.0
Equity	15.0

Development Impact

The proposed project is expected to generate a range of social and economic benefits related to financial inclusion and financial sector development in the project country. Specifically, the project will help to: (i) increase access to financial services by the lower end of the market; (ii) deepen financial inclusion through a focus on underserved clients, leveraging the investee's wide branch network; and (iii) foster healthy competition in the project country's financial sector as the investee broadens its target market segments and expands the scope of its services following its planned transformation.

- Financial Risk Mitigation: IFC will provide long-term funding of up to 7 years that is not always readily available in the local market.
- Standard Setting: IFC will introduce the investee to environmental & social ("E&S") standards and enhance its E&S risk management capacity to help it better manage E&S risks associated with its lending activities.
- Stamp of Approval: IFC's investment at a critical stage of the investee's transformation will provide a strong stamp of approval.
- Advisory Services: IFC will potentially provide advisory services to the investee for capacity building, and thus help it to successfully transition into offering new lending products to new target markets.

E&S Category Rationale / Risks and Mitigation

The project has been categorized as FI-2 according to IFC's Environmental and Social Review Procedures. BBS currently provides predominantly mortgage loans (88% of portfolio) and loans to commercial enterprises (12 %).Once BBS has demutualized, a suite of other banking products will be offered to customers, including loans to corporate entities (mostly SMEs) and various retail offerings. The portfolio risk is therefore considered medium. The applicable requirements are the Exclusion List, the relevant environmental and social laws and regulations of Botswana, and the Performance Standards where applicable.

The main E&S risks and impacts of this project relate to the ability of BBS to identity and manage the E&S risks and impacts associated with its lending activities. BBS has no Environmental & Social Risk Policy and Environmental and Social Management System (ESMS), and no capacity to undertake E&S risk management in place presently. BBS complies with IFC's Performance Standard 2 requirements on labor and working conditions.

Task Title & Description	Status	Comments	Completion Date
Nominate officers	Completed	Completed	01/01/2018
Establish SEMS	Completed	Final draft awaiting Board approval	01/01/2018
Staff Training	Rescheduled

Contacts

For Inquiries About the Project, Contact

Ndabezinhle Mpofu
Principal Investment Officer
14, Fricker Road
2196, Johannesburg, South Africa
Tel: (+27) 117 31 3126
Fax: (+27) 112680074
Email: mailto:nmpofu@ifc.org
http://www.ifc.org

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IFC supports its clients in addressing environmental and social issues arising from their business activities by requiring its real sector clients to set up and administer appropriate grievance mechanisms and/or procedures to address complaints from Affected Communities in relation to environmental and social issues arising from IFC's clients' business activities. Since 2012, IFC's Financial Intermediary clients applying the Performance Standards are required to develop External Communications Mechanisms to receive and review inquiries or complaints from any interested party regarding the E&S risks and impacts of their operations.

For IFC projects that are active or under consideration, individual(s), or their authorized representative(s), who allege they have been or will be adversely affected by E&S risks or impacts arising from IFC's clients' business activities, may submit a complaint to IFC directly for consideration. When receiving an E&S complaint, IFC engages with complainants and works with its clients to find solutions to E&S concerns as quickly and efficiently as possible.

Complaints can be submitted to IFC online at www.ifc.org/escomplaints or by email to EScomplaints@ifc.org.

IFC complaint response is separate from and complementary to IFC’s clients’ project level grievance mechanisms and IFC’s Independent Accountability Mechanism (CAO). Lodging a complaint directly with IFC does not, at any time, restrict access to CAO.

Affected communities have unrestricted access to the Compliance Advisor Ombudsman (CAO), the independent accountability mechanism for IFC and MIGA. CAO facilitates the resolution of complaints related to IFC and MIGA projects and sub-projects, undertakes reviews of IFC’s and MIGA’s environmental and social compliance, fosters public accountability for their commitments, and enhances the environmental and social performance of IFC and MIGA.

Independent of IFC and MIGA management and reporting directly to the IFC and MIGA Boards of Executive Directors, CAO helps resolve issues raised about the environmental and social impacts of projects through a neutral, collaborative, problem-solving approach via its Dispute Resolution function. It also reviews IFC’s and MIGA’s compliance with environmental and social policies, assesses related harm, and recommends remedial actions through its Compliance function. Additionally, CAO provides advice to IFC, MIGA, and their Boards to enhance environmental and social sustainability performance and minimize the risk of harm.

Complaints may relate to environmental and social harm regarding any aspect of the planning, implementation, or impact of a project or sub-project, and can be made by any individual, group, community, entity, or other party affected or likely to be affected by the environmental or social impacts of an IFC- or MIGA-financed business activity.

Complaints can be submitted by any of the following methods:

Online form: available at https://www.cao-ombudsman.org/
Mail/Hand Delivery to: 2121 Pennsylvania Avenue, NW, Washington, DC 20433, USA
Voice mail: +1 202 458 1973
Email: cao@worldbankgroup.org
SMS, WhatsApp, Telegram, and Signal: +1 202 650 2627

CAO receives and addresses complaints in accordance with the CAO Policy, which can be accessed at: https://www.cao-ombudsman.org/policies-guidelines.

This Summary of Investment Information (SII) is prepared by IFC to disclose a factual summary of the main elements of the potential investment. It also includes findings and recommendations related to environmental and social considerations regarding this potential investment. The purpose of the SII is to enhance the transparency of IFC’s activities. For any project documentation or data included or attached herein, whether prepared by the project sponsor or otherwise, authorization has been given for public release by the project sponsor. IFC considers that this SII is of adequate quality for release to the public, but has not necessarily independently verified all of the project information therein. It is distributed in advance of IFC Board of Directors’ consideration and may be periodically updated thereafter. Board dates are estimates only and this document should not be construed as presuming the outcome of the Board Directors’ decision. The following SII is disclosed in accordance with IFC's Access to Information Policy (AIP) that went into effect on January 1, 2012.

The map is for illustrative purposes and does not imply the expression of any opinion on the part of the World Bank, concerning the legal status of any country or territory or concerning the delimitation of frontiers or boundaries. Country borders or names do not necessarily reflect the World Bank Group's official position. In some cases, available project location information is limited to the country of the project's activities. Locations are approximate.

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